chester

Chester 01244 405 555

Grosvenor Court
Foregate Street Chester
Cheshire CH1 1HG
DX: 19990 Chester

shrewsbury

Shrewsbury 01743 443043

Lakeside House
Oxon Business Park
Shrewsbury SY3 5HJ
DX: 148563 Shrewsbury 14

Slide e

Airport City, Manchester 0161 537 3324

Offices 204 and 205
Manchester Business Park
3000 Aviator Way
Manchester M22 5TG

2nd September, 2021

Environmental warranties in the courts

Environmental warranties in the courts

Environmental warranties have rarely been considered in the courts; however, a recent example is MDW Holdings Ltd v Norvill [2021] EWHC 1135 (Ch).

The High Court upheld a buyer’s claims that the sellers had breached various warranties, including environmental warranties in the share purchase agreement (SPA). These breaches included compliance with environmental permits, consents required for the operation of its business and environmental law.

Facts:

The buyer’s main claim was for breach of warranties in the SPA.  The buyerargued that due to the non-compliant environmental practices, concealment, and failure to disclose those practices the sellers were in breach of the warranties within the SPA.

The buyer alleged that the target company had been breaching environmental law and avoiding the costs of environmental compliance. This in turn increased the company’s profit to levels it would not have reached had it acted lawfully.

The court awarded damages of £382,600 jointly and severally against the sellers. The decision was largely dependent on its own facts and is a relatively rare example of a breach of warranty claim in relation to environmental warranties.

Comment:

Sellers should ensure that the SPA includes language which is expressly aimed at preventing liability in misrepresentations such as:

  • A non-reliance statement recognising that the buyer has not relied on any representations in entering into the agreement.
  • A no representation statement recognising that seller has not made any representations in the run-up to entering into the agreement.
  • An express exclusion of liability for misrepresentation for both pre-contractual statements and any statements that are set out in the SPA.
  • An express waiver of non-contractual remedies.

Contact us



Contact Us

You might also be interested in...

Explaining the Recent Industrial Action in the UK

28th September, 2022

Throughout the UK, many sectors are facing the threat of industrial action. We have already seen rail workers,... Read More »

Why it pays to seek legal advice before undertaking a new development

12th September, 2022

Partner and Planning Lawyer, Mark Turner, discusses a long running case that highlights not only how seeking legal... Read More »

New Measures Announced to Control the Number of Second Homes in Wales

9th August, 2022

Mark Turner, Partner and member of the Planning, Environment, Energy and Regulatory team, discusses the current issue surrounding... Read More »

Contact Us